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Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains
Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains in approximately equal quantities, where the orders are about the same size. Data concerning Stinler's customer activity are as follows: | |||
Retail Stores | Individual Customers | ||
Units sold | 56,000 | 24,000 | |
Orders placed | 8 | 492 | |
Number of sales calls | 4 | 156 | |
Manufacturing costs | 8,000,000 | 3,500,000 | |
Order filling costs allocated | 375,000 | 225,000 | |
Sales force costs allocated | 265,000 | 135,000 | |
Currently, allocations of Order Filling and Sales Force costs are assigned to customers based on units sold, a unit-level driver. | |||
Show all calculation steps to | |||
Re-assign Order Filling and Sales Force costs to customers by using an ABC approach. |
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